Real Estate: What Anchor Tenant is and the Benefits to Business

The success of commercial properties depends on the capability to maintain and attract credit-worthy and highly recognizable anchor tenants. High-profile tenants in the commercial industry may maximize the potential for adjacent tenants trying to attract customers and establish market credibility.

Anchor tenants validate commercial industries as a suitable place to do business. According to Sands Investment Group, anchor tenants can help to validate commercial industry as a suitable place to do business.

Their presence may change the character of neighborhoods and bring prominence to emerging locations. While office buildings might have many tenants, it is known by their popular anchor tenants.

Anchor Tenant and Office Space

When visiting office complexes or scrolling through sites, you may consider pricing, location, amenities, potential foot traffic, transportation, and other related factors. However, before signing any lease, first look for all the details about anchor tenants renting the space.

Anchor tenants are a known business, which leases office space in a building complex and neighborhood that attracts many customers, including big companies. They look a bit different in an office complex than they do in the shopping mall, and the idea of the anchor tenant is changing, all thanks to:

· Market demands

· Online shopping

The Power of Anchor Tenants

Anchor tenants usually drive demand for space adjacent to them because of the sales of every neighboring business. This basically means the failure or success of retail shopping centers may depend on the ability of landlords to attract anchor tenants.

Aware of the traffic they normally draw, a potential anchor tenant traditionally uses this leverage to negotiate rents, which are not lucrative for property owners alone. Anchor tenants expect landlords to make up for all the losses with a higher rent to a smaller tenant.

Technological, social, and cultural changes have resulted in some disruptions in the retail sector. Classical models of shopping center developments are in evolution as developers carefully assess what really works and what doesn’t.

Important Negotiating Terms in the Co-Tenancy Clause

Co-tenancy requirements are not a standard clause to every lease in the commercial real estate industry. Typically, it’s something tenants push for to reduce the risks of retail communities breaking down during their lease term.

If tenants and landlords agree to the term, they should determine several key negotiating points. These key points include:

· Available relief

· Cure period

· The threshold

Importance of Anchor Tenants to Real Estate Business

Anchor tenants help draw customers in the areas because they are either well-known names or have unique items. In a strip center, anchor tenants are usually big-box stores, such as groceries stores, Target, or Wal-Mart.

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